The Umbrella company is planning to purchase one of two substances. Management wants a 20% return on all investments. Use the provided present value tables for this question. If you use excel or a different table your answer will be marked incorrect by the quiz autograder. The first is a substance known as Serum X. Serum X would cost $25,000 and would have a useful life of 10 years with zero salvage value. The expected annual cash flow of the serum is $10,000. The second substance is known as Serum Z. Serum Z would cost $20,000 and would have a useful life of 6 years with zero salvage value. The expected annual cash flows are as follows: Year 1 $7,000 Year 26,000 Year 3 5,500 Year 4 4,000 Year 5 3,000 Year 6 2,500 Required: 1. Compute net present value (NPV) of Serum X. 0 $ 2. Compute net present value (NPV) of Serum Z. 0 $ 3. Which Serum if any should the company purchase based on the payback period? Enter your answer as Serum X, Serum Z, or None. Periods (n) 600 GAWN =|| 1 2 3 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Periods (n) 1 NM5OT 2 3 4 10 Present Value of $1 at Compound Interest Interest rates (r) 1% 4% 5% 6% 7% 8% 0.926 0.943 0.935 0.890 0.873 0.857 0.842 2% 0.990 0.980 0.980 0.961 0.971 0.942 0.961 0.924 0.951 0.906 0.942 0.888 0.772 0.708 0.681 0.650 0.933 0.871 0.923 0.914 3% 0.971 0.962 0.952 0.943 0.925 0.907 0.915 0.889 0.864 0.840 0.816 0.794 0.888 0.855 0.823 0.792 0.763 0.735 0.863 0.822 0.784 0.747 0.713 0.837 0.790 0.746 0705 0.666 0.630 0.596 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.837 0.766 0.703 0.645 0.592 0.544 0.500 0.460 0.676 0.614 0.558 0.508 0.463 0.422 0.804 0.722 0.650 0.585 0.527 0.475 0.429 0.388 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.623 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.605 0.513 0.436 0.371 0.317 0.270 0.231 0.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.820 0.673 0.554 0.456 0.377 0.312 0.258 0.215 0.178 0.149 0.905 0.820 0.744 0.896 0.887 0.788 0.879 0.290 0.870 0.263 0.861 0.743 0.239 0.853 0.728 0.844 0.714 0.198 0.434 0.391 0.352 0317 11% 12% 0.901 0.893 0.812 0.797 0.712 0.731 0.659 0.636 0.593 0.567 0.535 0.507 0.482 0.452 13% 0.885 0.783 0.693 0.613 0.543 0.480 0.425 0.376 0.404 0.361 0.333 0.322 0.295 0287 0 261 9% 0.917 Interest rates (r) 14% 15% 16% 17% 18% 19% 0.847 0.840 0.877 0.870 0.862 0.855 0.743 0.731 0.718 0.706 0.769 0.756 0.675 0.658 0.641 0.624 0.609 0.593 0.592 0.572 0.552 0.534 0.516 0.499 0.519 0.497 0.476 0.456 0.437 0.419 0.456 0.432 0.410 0.390 0.370 0.352 0.400 0.376 0.354 0.333 0.314 0.296 0.305 0.285 0.266 0.249 0.351 0.327 0.308 0.284 0.263 0.243 0.225 0.209 0.270 0.247 0.227 0.208 0.191 0.176 0237 0 195 0 178 0 162 0 148 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0 135 Periods (n) 1 NM45 (100) 2 3 6 7 10 11 12 13 14 15 16 17 18 19 20 12% 13% 14% 11% 0.901 0.893 Interest rates (r) 15% 16% 0.870 0.862 0.885 0.877 0.812 0.756 0.743 0.797 0.783 0.769 0.693 0.675 0.731 0.712 0.658 0.641 0.659 0.636 0.613 0.592 0.572 0.552 0.593 0.567 0.543 0.519 0.497 0.476 0.535 0.507 0.480 0.456 0.432 0.410 0.482 0.452 0.425 0.400 0.376 0.354 0.434 0.305 0.391 0.263 0.227 0.404 0.376 0.351 0.327 0.361 0.333 0.308 0.284 0.352 0.322 0.295 0.270 0.247 0.317 0.287 0.261 0.237 0.231 0.208 0.229 0.204 0.182 0.163 0.205 0.181 0.160 0.141 0.215 0.195 0.286 0.257 0.187 0.168 0.152 0.258 0.145 0.130 0.232 0.125 0.111 0.108 0.095 0.093 0.081 0.069 0.209 0.183 0.160 0.140 0.123 0.188 0.163 0.141 0.123 0.107 0.170 0.146 0.125 0.108 0.093 0.080 0.153 0.130 0.111 0.095 0.083 0.087 0.073 0.061 0.081 0.069 0.059 0.116 0.098 0.070 0.060 0.051 0.138 0.124 0.104 0.051 0.043 0.037 18% 19% 17% 0.855 0.847 0.840 0.731 0.718 0.706 0.624 0.609 0.593 0.534 0.516 0.499 0.456 0.437 0.419 0.370 0.352 0.390 0.333 0.314 0.296 0.285 0.249 0.266 0.243 0.225 0.209 0.208 0.191 0.176 0.178 0.162 0.148 0.137 0.124 0.112 0.116 0.104 0.093 0.099 0.088 0.078 0.084 0.079 0.065 0.071 0.062 0.054 0.060 0.052 0.045 0.051 0.044 0.038 0.043 0.037 0.031 0.031 0.026 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 Periods (n) 1 2 GAWN 3 4 CTB9O 10 11 12 13 14 15 16 17 18 19 20 Periods 1 NM 410 NO 2 3 5 7 Present Value of and Annuity of $1 at Compound Interest 7% 8% 9% 0.926 0.917 Interest rates (r) 2% 3% 4% 5% 6% 0.980 0.971 0.962 0.952 0.943 0.935 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 1% 0.990 1.970 2.941 3.902 4.853 11% 0.901 1.713 2.444 2.402 3.102 3.037 3.696 4.486 5.995 6.418 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 10.368 9.787 9.253 8.760 8.306 11.255 10.575 9.954 9.385 8.863 12.134 11.348 10.635 9.986 9.394 13.004 12.106 11.296 10.563 9.899 9.295 13.865 12.849 11.938 11.118 10.380 9.712 12.561 11.652 10.838 10.106 9.447 13.166 12.166 11.274 10.477 9.763 9.122 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 17.226 15.679 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 18.046 16.351 14.878 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.536 8.853 8.358 7.904 8.745 8.244 9.108 8.559 14.718 13.578 8.851 8.313 7.824 15.562 14.292 8.544 8.022 4.231 4.712 12% 0.893 1.690 13% 4.111 4.564 0.885 1.668 2.361 2.974 3.605 3.517 3.998 4.423 J700 7.887 7.499 8.384 7.943 Interest rates (r) 7.139 6.805 7.161 7.487 7.786 8.061 10% 0.909 1.736 14% 15% 0.877 0.870 18% 19% 0.847 0.840 1.547 1.647 1.626 2.322 2.283 16% 17% 0.862 0.855 1.605 1.585 1.566 2.246 2.210 2.174 2.140 2.914 2.855 2.798 2.743 2.690 2.639 3.433 3.352 3.274 3.199 3.127 3.058 3.889 3.784 3.685 3.589 3.498 3.410 4.288 4.160 4.039 3.922 3.812 3.706 707 070 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 6.495 6.814 7.103 7.367 7.606 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 Periods 1 NMOTOROINMHE 6 2 3 10 11 12 13 14 15 16 17 18 19 20 12% 14% 19% 13% 0.893 0.885 15% 0.877 0.870 Interest rates (r) 16% 17% 18% 0.862 0.855 0.847 0.840 1.690 1.668 1.647 1.626 1.605 1.585 1.566 1.547 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 3.037 2.974 2.914 2.855 2.798 2.743 2.690 2.639 3.605 3.517 3.433 3.352 3.274 3.889 3.199 3.127 3.058 4.111 3.998 4.564 4.423 4.712 4.288 4.639 5.146 4.968 4.799 5.537 5.328 5.132 4.946 5.889 5.650 5.426 5.216 6.207 5.938 5.687 5.453 6.492 6.194 5.918 5.660 6.750 6.424 6.122 5.842 6.982 6.628 6.302 6.002 5.724 7.191 6.811 6.462 6.142 5.847 6.974 6.604 6.265 5.954 7.549 7.120 6.729 6.373 6.047 7.702 7.250 6.840 6.467 6.128 6.550 6.198 7.025 6.623 6.259 7.379 7.839 7.366 6.938 7.963 7.469 11% 0.901 1.713 2.444 3.102 3.696 4.231 3.784 4.160 4.487 3.589 3.498 3.685 4.039 3.922 3.812 4.344 4.207 4.078 4.772 4.607 5.019 4.833 4.451 4.659 5.234 5.421 5.583 5.342 5.468 5.575 3.410 3.706 3.954 4.303 4.163 4.494 4.339 5.029 4.836 4.656 4.486 5.197 4.988 7.793 5.118 4.910 5.229 5.008 5.324 5.092 4.611 4.715 4.802 4.876 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 5.668 5.405 5.162 4.938 4.730 5.749 5.475 5.222 4.990 4.775 5.818 5.534 5.273 5.033 4.812 5.877 5.584 5.316 5.070 4.843 5.929 5.628 5.353 5.101 4.870